Kosmos Says Transocean Rig Damage May Delay Ghana Drilling

A force majeure notice was delivered to the government of
Ghana and Ghana National Petroleum Corp. after an anchor-
handling accident damaged the rig, Dallas-based Kosmos said
today in a statement. The Marianas was scheduled to arrive July
10 for drilling, Kosmos said.

Kosmos said it anticipates that either the Marianas or a
substitute rig will be “available soon” to drill the Cedrela-1
well in the West Cape Three Points Block. Yesterday 108 of 121
workers on the vessel were evacuated after it took on water
while preparing to leave an Eni SpA drilling site roughly 40
miles off Ghana, the rig owner said.

The market for deep-water rigs in that part of the world is
so tight that Kosmos will likely have to wait at least a month
for a comparable drilling vessel, said Brian Uhlmer, an analyst
at Global Hunter Securities in Houston. Moving an unused rig
from the Gulf of Mexico could take about 45 days.

“There’s literally nothing in Ghana that can come back to
work quickly,” Uhlmer said. “I think the most likely is to
pull something from the Gulf.”

Towing for Repairs

Transocean expects it will take at least a week to tow and
inspect the rig for damages, Guy Cantwell, a spokesman for the
Vernier, Switzerland-based drilling contractor, said today in a
telephone interview. No estimates can be made on the damage or
where the repairs will take place until the inspection is
complete, he said.

Some workers will return to the rig, “but not a tremendous
amount,” Cantwell said, declining to give specific numbers.
Workers are monitoring the situation and removing water from the
vessel, he said.

The Marianas rig, which was used in 2009 to start drilling
the Macondo well for BP Plc in the Gulf of Mexico, may be out of
service for as many as 180 days with most of the time taken up
by moving it to a yard and final inspections, Uhlmer said.
“It’s not like fixing your kid’s soccer ball,” he said.

The rig started drilling the Macondo well on Oct. 6, 2009,
and was damaged a month later by Hurricane Ida, according to a
report posted on Transocean’s website. Drilling was suspended
while the rig was moved to a shipyard for repairs.

Bad Luck Rig

Taking its place at the well was Transocean’s Deepwater
Horizon rig, which exploded and sank in April 2010, leading to
the largest U.S. offshore oil spill.

“It’s a bad luck rig,” Uhlmer said.

Geoff Kieburtz, an analyst at Weeden & Co. in Greenwich,
Connecticut, said he’s still trying to understand how serious
the situation is after more than 100 people were removed from
the rig.

“You don’t do that unless you’re reasonably concerned
about something,” he said in a telephone interview. “On the
other hand, you don’t leave 13 people on there if you think it’s
an imminent threat. So, it’s all a little bit fuzzy to me.”

While parts of the Marianas rig date to 1979, the rig was
upgraded in 1998 and is able to work in water as deep as 7,000
feet (2,000 meters), according to a Transocean regulatory
filing. The rig wasn’t drilling when the water was discovered
and it was stable, Cantwell said yesterday.

Kosmos operates the West Cape block and holds a 30.875
percent interest, according to a July 5 statement. An Anadarko
Petroleum Corp. (APC) affiliate also holds 30.875 percent, a Tullow
Oil Plc (TLW) affiliate holds 22.896 percent, Sabre Oil & Gas holds
1.854 percent and E.O. Group Ltd. has 3.5 percent of the block.
Ghana National Petroleum has a 10 percent interest.